Lenders link this to the rental income of the property and depends on the type of property, your tax rate and the mortgage product.
This will depend on whether you’re buying for long-term capital growth or to maximize your income. Our experts will show you.
Our team has years of industry knowledge and this experience is invaluable to help maintain and grow your portfolio. We also have access to exclusive rates from lenders that only deal with brokers like us.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £495.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Fancy life as a landlord, or have a property you don’t want to sell yet and need to rent out? Then you will need a Buy to Let Mortgage. This is a special type of mortgage that allows a current or prospective landlord to buy a property with the intention of letting out that property to tenants. It’s a great way to get some extra income and expand your property portfolio. But things aren’t as simple as they were a few years ago and you need to know about all the recent changes (don’t worry, we are fully up to date and will guide you through them).
Whether this is to grow a portfolio, to obtain short-term capital growth or long-term income supplement, it is important to weigh up all the options with an experienced professional. Low rates may seem attractive, but a plethora of fees and reversion rates can come back to bite.
Unlike looking for a property to live in, you need to remove emotion and consider the investment potential of the property. Below are some key considerations you should think about:-
For experienced landlords, or for those with a large property portfolio, actively managing your portfolio to ensure you have the right rate on each property or are able to gear up and release equity for future purchases is of vital importance when looking to grow.
We have years of experience helping landlords do just that, in fact, we have a special team of people. It may be possible to agree on a credit line or facility for you to buy additional properties quickly and cheaply, making the most of rental and capital growth opportunities.
For professional landlords, the Prudential Regulation Authority, (PRA) have been explicit in the fact that they feel mortgage lenders should be underwriting portfolio landlords, defined as anyone with 4 or more mortgaged properties in a very different way to those with just a couple of properties.
Those applying for a mortgage will now need to provide more information which can include the following:
Our experts at Coreco know which lenders require what and can help ease the burden to direct you to the most appropriate lender.
Limited Company Borrowing.
Given the recent tax changes [link] many of our landlords now want to borrow in a Limited Company rather than personal names. We strongly recommend, in fact we insist, that our clients obtain independent tax advice to ensure they are borrowing in a manner that is right for them.
If a Limited Company is the preferred route, then no worries. Our experts know exactly which lenders can help and offer you the very best rates to fit your particular circumstances.
Residential Development and Commercial Finance
For landlords with portfolios of a certain size, the line often blurs between residential investment and commercial financing, whether it is developing a site, converting a property into flats or even building from scratch. Getting the right advice, finance and advice in this area of the market is just as critical and can often mean the difference between turning a healthy profit or not.
Section 24, dubbed “the biggest threat landlords have ever faced”, ushered in a new era of tax changes phased in from 6th April 2017, which will come to a head in 2020. This potentially pushes landlords into a higher tax bracket, paying more tax and potentially losing access to certain benefits.
In summary, this package included the following:
Currently, a licence is only required for properties with three or more storeys that are occupied by five (or more) people from at least two households. From 1 October this will be extended to all properties that are occupied by five or more people from two or more households – regardless of the size of the property.
However, even with all of this, professional landlords are sensing an opportunity and as long as you structure and gear your portfolio correctly with the right tax advice, savvy landlords can still do good business.
It is more important than ever to look for a broker who understands the current market and the numerous foibles of each individual lender. Luckily for you, we do! Managing a portfolio is a serious blend of science and art these days, but for those with the patience and an expert like us alongside them, landlords can still look to the future.
We know you’re curious so we’ve picked out some of today’s best mortgage rates to give you an idea which lenders and interest rates could be available to you.
Based on a property value of £300,000 with a mortgage of £180,000.
Keep up to speed with the latest buy to let changes with our jargon-busting mortgage guides.
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